The Smith Group Report November 2011

The Smith Group has been active since 2005, advising and guiding Ministers in successive administrations on education policy, enterprise in education and youth employment issues.

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November 24, 2011

THE SMITH GROUP - RECOMMENDATIONS FOR THE SCOTTISH GOVERNMENT

The Smith Group (the Group) has been active since 2005, advising and guiding Ministers in successive administrations on education policy, enterprise in education and youth employment issues. The composition of the Group is its strength, bringing together leading figures in business and education to bring fresh perspective to what is at once a challenge and an opportunity - how Scotland can best prepare its young people to make effective contributions in their adult lives.

In particular, the Group has focused on those young people not in education, employment and training (NEET), both in terms of the factors that contribute to a young person becoming NEET and those interventions that can be most effective in helping a young person to find employment or training.

The Group has approached its remit on the basis that there should be no sacred cows. We are not beholden to any political party, ideology or policy approach.

The Impact of the Smith Group

We believe that the formation of the Group and its work has resulted in a number of positive outcomes:

The Group has contributed to creating a wide understanding of the NEET issue across Scotland through its work with Government, employers, local authorities and other partners.

The 'More Choices, More Chances' (MCMC) framework was influenced by Smith Group members.

Partnerships amongst those agencies most closely involved in addressing the NEET issue across Scotland have improved.

Data capture on the school population and post-school destinations is now more sophisticated and effective. This has helped to focus attention on those young people most in need of support.

There is now a greater appreciation of, and focus on, steering young people towards 'positive destinations' by school leaderships and education authorities.

The Group has been effective in emphasising the importance of 'pastoral support' for young people after entering employment.

A National Issue, a Growing Challenge

We believe that successive Ministers have tried hard to address the NEET issue. Initiatives such as MCMC, 16+ Learning Choices and increasing numbers of new apprenticeship starts are to be welcomed. Since the financial crisis, the Government's response in cushioning young people from the effects of recession by keeping as many school leavers as possible in learning places beyond the age of 16 has been sensible.

Ultimately, education and training must only be viewed as a means of gaining the skills that take a young person nearer to fulfilling employment. In the context of a young person being equipped to make an effective contribution to Scotland's economy, it cannot be seen as a final destination.

Scotland and its political leadership must now concentrate on the outlook for those young people leaving learning and training and attempting to access the labour market. The following factors should be considered:

Short-term, increasing numbers of young people staying at school beyond S4, in addition to greater numbers currently in further education, will result in unprecedented demand for further learning, support and employment.

Scotland's public sector, a major employer of young people, must come to terms with cuts in expenditure, with an as yet unquantified impact on youth employment opportunities.

The phasing out of the default retirement age will require employers to reconsider their approach to hiring young talent as existing employees work later in life.

Employment levels in the immediate aftermath of a recession remain generally depressed. This may result in a rise in the number of young people out of work for more than 12 months. These young people are more vulnerable to developing significant long-term issues such as poor health and social outcomes at significant cost to the individual and taxpayer.

With the exception of the change to the default retirement age, the factors described above stem from the economic environment created by the 2008 banking crisis. However, youth unemployment was rising before 2008 and will remain a serious national issue after the short to medium term effects of recession run their course. The key factors contributing to this enduring trend include how young children develop from early years; adequate parental or role model support; and ensuring that the education and skills frameworks for young people are aligned to the needs of the Scottish economy. These are significant and complex issues.

The Group acknowledges attempts to tackle these through initiatives such as Professor Susan Deacon's recent report 'Joining the Dots', examining approaches to early years policy and the increasing emphasis on effective partnership working across agencies to focus on young people with challenging personal circumstances. These are not issues that can be resolved quickly but there is a clear imperative to invest time and resources in a lasting solution.

Creating sustainable employment is the solution to these short and long term challenges. Our recommendations are intended to create an environment in Scotland where young people of all backgrounds can more easily achieve this goal.

RECOMMENDATIONS

Political Leadership and Funding

The costs to society of ignoring disaffected 16-19 year olds are enormous, in addition to the financial costs outlined earlier. We recommend that the issue is of such significance that it should be tackled through a dedicated ministerial portfolio, rather than an 'add-on' to a wider brief. This would provide the appropriate level of accountability for a national priority.

To deal coherently with youth unemployment requires a strong connection between national strategy and local delivery. The Group believes that this connection must be strengthened and ministerial focus would go a long way to achieving this.

Political leadership, with the funding to back it, is required to give Scotland the best chance of reducing youth unemployment.

We understand that local authorities must have autonomy in spending decisions in order to address local priorities. The concordat between the Scottish Government and councils recognises this. The Group believes though, that the seriousness of the NEET issue requires secure funding. If we are committed to finding a solution which endures, we recognise that other policy areas are going to lose out at a time of constraint in the public sector finances. However, we must apply business logic to society's problem.

Targeting the 'At Risk' Population

As data capture on young people has improved, the Scottish Government and local authorities have a clearer idea of the profiles of the young people who are likely to become NEET. When MCMC was launched in 2006, it identified that 40% of the lowest attaining pupils came from 10% of the most deprived communities. Further analysis of Scotland's 10 NEET 'hotspots' has been undertaken over several years and collated by the Scottish Government.

The Group believes that more is now known about those most at risk of becoming NEET than before. This provides an opportunity for direct preventative action in a way that would previously not have been possible.

Examples may include:

Engaging early in the education of a young person to ensure their learning outcomes meet their individual aspirations and competencies. The Group understands that the Curriculum for Excellence is designed to allow this 'personalised' learning.

Mentoring from a trusted adult role model.

Understanding the young person's environment and allocating appropriate support - if a child is growing up in a home defined by worklessness, something as simple as taking the young person to day care or school in the morning and dropping them off afterwards can make a big difference to +-their motivation.

The Group also believes that effective targeting, based on reliable evidence, supports a case for significant levels of investment in those parts of Scotland where the NEET problem is highest. This population of young people is the most likely to become highly dependent on the public sector throughout their adult lives. Early intervention can make a profound difference to their life chances.

Again, we believe that ministerial leadership at a national level would most effectively move this approach forward. There is clear scope, if this approach is chosen, to engage with the voluntary sector as delivery partners.

Effective support at critical stages of development

The Group believes that there are stages in the development of our young people that are of particular importance in determining their potential.

There are a number of global studies that reinforce the fundamental importance of pre-school education in raising the life chances of young people. We support this position and take the view that the pre-school years represent perhaps the greatest opportunity in determining future destinations for young Scots. We are aware that the Scottish Government is examining closely its early years policy and we are supportive of this development. We would be concerned if funding by local authorities of early years education declined.

The second stage that we believe merits closer scrutiny is the importance of making a successful transition from primary to secondary school. This can often be a difficult jump to make for many young people, moving from a single 'parent figure' primary teacher to an environment with multiple teachers and multiple subject categories.

The Group recommends:

The Scottish Government engages with local authorities to ensure that funding for pre-school education can be safeguarded

New early years policy strengthens the importance of pre-school education

Education authorities re-examine how the transition by young people from primary school to secondary school is currently handled, in particular, identifying why some young people become unsettled and disengaged by the move and putting in place a process to address this

Narrowing the Gap Between Education and the World of Work

Motivated young people will tend to end up in positive destinations after leaving school. The role of the education system is to achieve this and the system needs to be responsive to the world of work. Scotland's schools are the transmission device for ensuring our pool of young talent can match the future skills needs of the nation.

Despite changes in the qualifications system in Scotland in the past two decades, Scottish pupils continue to follow a traditional journey through the education system that has been recognisable since the 1950s and 60s and is defined by a set of exams in S4 and a set of exams in S5 and S6 that determine whether or not you will make it to University or College. Our Universities, which stand comparison to any around the world, justifiably influence the schools exam system. This, in turn, influences the curriculum and subsequently, delivery in the classroom. For many young people, this is meeting their aspirations.

For others, including many in the NEET population, this approach is not suitable. That doesn't mean they are not University material, but, by the time they reach S4, many have become disaffected. It is time to consider something different, not only for this group, but also as a pragmatic response to the wider issue of employability.

The Group does not take a firm view on the sustainability of further and higher education funding in Scotland. We do observe the effects that changes to University funding in England and Wales are beginning to have on traditional recruitment routes and suggest that policy makers in Scotland should pay close attention. Major recruiters of graduates such as KPMG and GlaxoSmithKline have recognised that University tuition fees will deter many able school leavers from entering degrees. They have responded by introducing new direct routes into their firms for school leavers. If this trend continues, it begins to disrupt traditional assumptions that employers, teachers, pupils and policy makers hold about how talent is identified and flows into the world of work.

This example focuses on traditional 'high attainers' but it has a resonance for all our young people. Employers will increasingly develop an interest in identifying talent at an earlier age than the University milkround. This may reverberate beyond the bulge recruiters of graduates to employers more widely. They will seek new ways to spot talent within the schools system. This should be viewed as a great opportunity. It provides a real incentive for the Scottish education system to embed the sense, as early as possible, that teachers are preparing young people for the workplace. An appropriate response should not be informed by short term views on supply and demand, but should encompass the fundamental social, infrastructural and cultural changes necessary to achieve longer term national success.

The Group recommends:

A focus on skills (skills for learning, life and work) development throughout a child's formal education from primary to S3 and preparation for the world of work during the senior phase and beyond. This should include work experience tailored to meet individual needs including, specifically, for those young people who may have disengaged, or who are disengaging, from learning.

Engaging support from employers from the public and private sectors and voluntary organisations across the country to provide part-time work opportunities.

Introducing a system of Training Champions - a modern take on the trades system of 'journeymen' - to directly support, motivate and inspire the young person. They will be linked to education authorities and Skills Development Scotland and provide day-to-day support for learners and participating employers.

Basing awards on a combination of learning, training and work placement performance.

Ensuring flexibility to enable the programme to be occupationally specific or more generally based around useful workplace competencies. Attainment will be recognised in a national framework alongside the core curriculum and would lead to a modern apprenticeship, further education or full time employment.

Challenging the assumption that financial support is provided for participation. Incentives such as the Education Maintenance Allowance should be tied to preparing for the workplace.

These recommendations are radical and challenging. They require commitment and genuine partnership between employers and educators to implement but we believe that they would be effective for young people in bringing the worlds of the classroom and the workplace closer together.

The Group has further recommendations for the Scottish Government to consider:

Ensure that parents and carers understand how the education system is preparing their young people for employment.

Ensure that the teaching profession recognises and is engaged with the imperative of opening the eyes of their pupils to the world of work through their delivery of the curriculum, beginning in primary school.

The Role of the Public Sector in Youth Employment and Training

Scotland's largest employer is the public sector. As well as providing a safety net for the most disadvantaged young people through the provision of social care and health services, the Group believes our public sector can also set an effective tone for the rest of the country's employers.

We recommend that Ministers consider to what extent the employment and procurement practices of our public sector agencies can be used effectively as a positive way of providing employment, placements or work experience for the NEET population.

Employer Engagement

The importance of effective employer engagement is difficult to exaggerate in addressing youth unemployment. Although there is no guarantee that effective engagement will lead to job offers, young people meet the employer's need for talent to grow their businesses. Employer feedback also acts as a 'canary in the mineshaft' for the coordination of economic policy and skills development.

It stands to reason then, that schools, skills agencies and training providers should have strong links to employers in their area. There should also be awareness at a national level that engagement is happening effectively and that local delivery is meeting the needs of wider economic development strategies.

The Smith Group has appointed ambassadors to work with some local authorities in Scotland over the last two years in the area of employer engagement. This has provided some useful insights for our recommendations.

Overall, the Group believes that employer engagement has improved since our work began. We believe there is a great deal of scope to further develop this important area.

The Group recommends:

The Scottish Government should ensure that a strategy is in place that clearly defines expectations of, and outcomes for local authorities in employer engagement. This would allow consistency in delivery across 32 local authorities. We feel strongly that the starting point for the strategy should first reflect the imperatives of the young person and employer, followed by local authorities and training providers. Effectively, this is a sales strategy and, as such, should identify target markets, clarify propositions, define measurement and report on progress.

The strategy should also create a proactive resource for disseminating good practice in employer engagement across councils. The Minister should ensure that there is clear accountability for delivering the strategy. Implementation, rollout and monitoring should be dealt with by a single co-ordinating body.

Scotland's largest employers should be treated differently. These businesses are receptive to engagement on employability issues as their need for talent is greater as a consequence of their size. However, large and very large businesses operate across multiple sites and often make human resource decisions from head offices outside Scotland. Local authority approaches are not always relevant to the way big businesses plan their talent strategies. Therefore, we recommend that a forum for senior corporate representatives from our largest employers is created, with direct engagement from the Minister or senior officials two or three times a year, to ensure skills priorities and shortages are understood.

Employers should be presented with a straightforward proposition at the point of engagement. Feedback from Smith Group ambassadors highlights the employer perspective of a cluttered landscape of multiple routes and schemes. Communications material should reflect more strongly the employer's perspective and needs. We believe that this is an area that is improving, but can be developed further.

Local authority staff would benefit from coaching in understanding employer needs. Councils are doing a good job in meeting employers but often the initial 'ask' is unclear. This can often mean employers are confused about the purpose of the engagement and how they can contribute.

Skills Development Scotland

As Scotland's agency for skills and a crucial deliverer of services and advice to employers, young people and training providers, Skills Development Scotland (SDS) is, in the eyes of the Group, uniquely placed to take on some of our recommendations. We are encouraged by steps that the agency is taking in relation to employer engagement and also in developing a national dataset on the young people that most need assistance in gaining employment.

The Group recommends:

That SDS should be the body tasked by Ministers to deliver a national employer engagement strategy, with a robust approach to engaging with large, medium and smaller employers

That Ministers explore the national commissioning potential of SDS to enable good practice to be rolled out across local authorities

That Ministers examine the case for SDS taking control of DWP training for work spending. The Group accepts that the benefits system is reserved but a powerful argument can be made that training for work is, in fact, a crucial element of Scotland's economic development strategy

To conclude, we want a nation with the most able and confident young people in the world. We want these young people to take responsibility for their progression and recognise the value of employment at an early age. We recognise that they need support to do this and we hope that we have provided some new thinking on how that may be achieved.

This report marks the culmination of the work of the Smith Group. The Group feels that the importance of addressing the NEET agenda is now well understood across Scotland. Our recommendations, we believe, will be important in the next steps of steering our nation's talented young people towards effective contributions and sustainable employment.